COVINGTON, KY – The City of Covington received updated information regarding the recent announcement of the Internal Revenue Service’s (IRS) closure of its Flat Top Covington facility.
On Wednesday, September 14, the IRS announced it will be closing its Flat Top facility in Covington as of 2019, resulting in the elimination of nearly about 1,800 jobs in the area.
Mayor Sherry Carran, City staff, and representatives from Kenton County, the federal government and regional economic development representatives gathered for a conference call with Washington D.C. Thursday morning to verify details of the IRS closing and to discuss the next steps in the days and months ahead.
Mayor Carran stated, “It was a productive call. Questions were asked and concerns expressed regarding the IRS’s decision. The City and other key representatives are working together to assess what actions need to be taken to help those affected and to plan for the City’s next steps.”
As a result of the meeting, questions were asked to the IRS regarding the future of the location and the impact it would have on its employees as well as the City. By the end of the day, the IRS responded with additional information and clarification.
The City of Covington received confirmation that only the 23- acre flat top facility located at 200 W. Fourth Street would be affected. The nine-story Gateway Center IRS building on Scott Blvd. will not be impacted.
The IRS stated that of its Covington employees 1,900 jobs would not be affected, 1,800 positions would no longer have the same work, and 61 employees will be relocated from the Flat Top facility to another IRS location.
The City received confirmation that a total of 1,814 jobs will be eliminated as of 2019, however, not all of these jobs come from the Covington location. The Florence facility will eliminate 176 jobs at its location, reducing the number of lost jobs in Covington to 1,638 in 2019.
As a result of the closure, there is an estimated payroll tax loss to the City beginning in late 2019. The loss is roughly 3% of its total current annual revenue. Importantly and notably, the City’s revenue increased by more than that amount in FY 16 alone due to revenue growth in other areas such as new development, and property value increases, and payroll taxes from current and new employment.
The City inquired as to what future job opportunities the IRS will provide for employees at the current and alternate facilities. Additionally, questions were asked as to any retraining and/or job search assistance the IRS would administer for impacted employees.
City Manager Larry Klein stated, “We want to make sure impacted employees have the resources they need when searching for employment. We’re working closely with the IRS to see what additional assistance they are able to provide to help those affected and what local resources we have such as Gateway Community and Technical College. We also sympathize with the IRS employees in Austin, Texas and Fresno, California who are in a similar situation.
“While we had hoped the IRS would be able to relocate these jobs to the Gateway Center facility, news of the announcement allows the opportunity for redevelopment of the 23-acre site. There are endless possibilities as to what this property could be used for, including the potential expansion of the Convention Center, residential and commercial development, a large institutional-type user, public space, and of course public parking to accommodate our current and future parking demands, similar to what has developed on the Cincinnati side of the Ohio River in recent years. We realize the need to plan for the future is now.”